As President Barack Obama and Republican leaders race to avoid the "fiscal cliff,"Bank of America CEO Brian Moynihan said the uncertainty has already hurt business spending for 2013 and said the failure to reach a resolution by year-end presents not only a near-term recession risk, but also the possibility of longer negative effects.

"I'm more concerned about business behavior slowing down than I am about consumer behavior," Moynihan told "Squawk Box" in a CNBC exclusive interview. "I think we're in danger if this thing strings out into 2013 that you could start to have problems of what 2014 would look like."

Moynihan is a member of the CEO Council of the non-partisan Fix the Debt campaign along with dozens of other business leaders including JPMorgan Chase CEO Jamie Dimon and Goldman Sachs CEO Lloyd Blankfein. They've been calling for Washington to Rise Above politics and reach a comprehensive agreement to stabilize and reduce the federal debt as a share of the economy.

Failure to act poses a "near-term recession impact," according to the Bank of America chief. "[Stock market levels] are in decent shape and consumers and the economy (have) been growing. The question was will everything going on cause them to slow down?"

Yesterday, House Republicans countered the president's earlier proposal to avoid the mandatory tax increases and spending cuts of the fiscal cliff with a plan of their own that includes $800 billion in increased tax revenue. That's about half of what the White House wants and it was promptly rejected.

"I'd rather have higher interest rates because it means the economy's growing. If the economy's growing, we're gonna do better as an industry," said Moynihan who, like all banking CEOs, would rather have rates higher because that makes it easier to make money.

But Moynihan did acknowledge that the Federal Reserve is trying to help the economy with its easy money policies that are keeping interest rates low for the foreseeable future.

Despite the low mortgage rates, Moynihan said, "We'll do more mortgage originations this quarter than we did last quarter, than we did the quarter before, than we did the quarter before."

Bank of America is seeking to raise revenue by expanding relationships with its banking customers rather than increasing fees.

"What we're doing is everything we can to drive relationship banking," said Moynihan. "The more relationship people have with us, they'll be able to avoid fees and charges because it's a trade of value and that's what we've been after."

Moynihan would not comment on whether any fees would be going up or the timing related to any such move.